It's showtime but hotel tax sends conflicting signal

Stacy Shi

About HK$1.1 billion will be allocated to monthly fireworks and drone shows over Victoria Harbour to boost tourism, and hotels will begin charging customers a three percent hotel accommodation tax from January 1 next year.

The pyrotechnic and drone displays - which will cost HK$1 million per show - are expected to light up the sky from the second quarter of this year.

The hotel tax is expected to bring in about HK$1.1 billion to government coffers in the year.

"The hotel tax is estimated to only account for less than one percent of the total spending of overnight visitors in Hong Kong," Paul Chan said.

Each overnight visitor spent an average of nearly HK$7,000 for a trip in Hong Kong last year, and they are expected to pay HK$51 more on average each night after the hotel accommodation tax is resumed, government sources said.

A three-percent hotel accommodation tax scheme was implemented from 1998 to 2008.

About 317 hotels and 180 guest houses, with a total of 90,000 rooms will be subject to the hotel accommodation tax. But hotels and guest houses with no more than 10 rooms and non-profit ones will be exempted from the levy.

The mainland, Macau and other countries have also adopted such taxation, sources said.

Meanwhile, the Tourism Board will revamp the "A Symphony of Lights" show over the harbor, with an allocated budget of HK$354 million.

To bring a better experience to visitors at the harbor, the Development Bureau will establish two unmanned facilities equipped with intelligent vending machines selling snacks and beverages at Kowloon east and Wan Chai north by the middle of this year on a pilot basis.

The board will also promote "immersive, in-depth tourism" activities such as the "CityWalk," hiking, cycling, stand-up paddle-boarding, trail running and stargazing.

Tourism Board chairman Pang Yiu-kai said the funds would "maximize the contribution of the tourism industry to Hong Kong's economy."

But pyrotechnic and drone shows might have minor appeal to mainland visitors, as they said these shows only have special meanings during a festival.

On the accommodation tax, tourism sector lawmaker Perry Yiu Pak-leung said it is "a little bit contradictory" for the government striving to attract tourists to be collecting tax from them at the same time. Yiu believed it would be better to collect tax only when the tourism industry had fully recovered.

He hoped the revenue would be invested in supporting technological transformation and providing training in the industry.

Federation of Hong Kong Hotel Owners executive director Caspar Tsui Ying-wai worried the taxation would affect low-cost tour groups.

Chan also said the SAR will stage more than 80 mega events in the first half of this year, and the government has earmarked HK$100 million to boost mega-event promotions over the next three years.

The government will also launch a new scheme to sponsor renowned scholars and industry leaders to attend overseas events and give speeches to promote Hong Kong.